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Consider the following information for the year 2020. What is the company's internal growth rate? Revenue $35 million Costs/Expenses (excluding depreciation) $24 million Depreciation $4 million Interest Payments $1.5 million Tax Payments $1.2 million Payout Ratio 30% Equity (book value) $35 million Assets (book value) $58 million 12.3% 8.6% 5.2% 7.4% You have the following information from 2020 and are looking to forecast 2021. In 2021 you expect sales to be equal to $11 million. Assume the payout ratio is 40%. Using the "Percent-of-Sales" method, what amount of Retained Earnings will the company generate in 2021? Account 2020 Information Costs (excluding Depreciation) 74% of Sales Depreciation 6% of Sales Cost of Debt 7% Debt $20 million Taxes 1.5% of Sales Tax rate 25% $240,000 $360,000 $300,000 $420,000 You are in an executive meeting with the CFO discussing the forecasting plans of the company. The CFO says, "Forecasting often involves creating forward- looking financial statements known as pro formas. It is important to use forecasting as a tool to help us foresee any potential cash shortfalls in the future. Our forecasts will also help us determine the level of external spontaneous credit we'll need to finance any increases in long-term assets." Which of the above statements made by the CFO is incorrect? all of the statements are correct statement regarding cash shortfalls statement regarding external financing statement regarding the pro formas

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